LODGENET ENTERTAINMENT CORPORATION SEVENTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.27
LODGENET ENTERTAINMENT CORPORATION
SEVENTH AMENDMENT TO CREDIT AGREEMENT
This SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of October , 2006 and entered into by and between
LODGENET ENTERTAINMENT CORPORATION, a Delaware corporation (“Borrower”) and CANADIAN IMPERIAL BANK
OF COMMERCE, as administrative agent for the Lenders (in such capacity, “Administrative Agent”),
and is made with reference to that certain Credit Agreement dated as
of August 29, 2001, as amended
(the “Credit Agreement”), by and among Borrower, the Lenders named therein, Administrative Agent,
the Syndication Agent named therein, the Co-Documentation Agents named therein, the Co-Lead
Arrangers named therein and the Swing Line Lender named therein. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to make certain amendments to the Credit Agreement as
provided for herein;
NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1
Amendments to Section 1: Certain Defined Terms.
A. Subsection 1.1 of the Credit Agreement is hereby amended by deleting the definition
of “Consolidated EBITDA” in its entirety and by inserting in lieu thereof the following:
“Consolidated EBITDA” means, for any period, the sum, without duplication, of
the amounts for such period of (i) Consolidated Net Income, plus the following to the
extent deducted in determining Consolidated Net Income, any purchase accounting
adjustments, change of control payments, fees and expenses and other
non-recurring
items or expenses the aggregate amount of which does not exceed $1,500,000 incurred
in connection with an Investment permitted under subsection 7.3(vi) of the Credit
Agreement to the extent reasonably satisfactory to the Co-Lead Arrangers, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and
(vi) other non-recurring and
non-cash items reducing Consolidated Net Income, less interest income and any
non-recurring and non-cash items increasing Consolidated Net Income, all of the
foregoing as determined on a consolidated basis for Borrower and its Subsidiaries in
conformity with GAAP.”
1.2 Amendments to Section 2: Amounts and Terms of Commitments and Loans.
A. Subsection 2.3A of the Credit Agreement is hereby amended by deleting it
in its entirety and by inserting in lieu thereof the following:
“Revolving Loan Commitment Fees. Borrower agrees to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender’s Pro Rata Share
of the Revolving Loan Commitments, commitment fees for the period from and including
the Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over the
sum of (i) the aggregate principal amount of outstanding Revolving Loans (but not
any outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage
multiplied by 0.375% per annum, such commitment fees to be calculated on the
basis of a 360-day year and the actual number of days elapsed and to be payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each Fiscal Year, commencing on the first such date to occur after the
Closing Date, and on the Revolving Loan Commitment Termination Date.”
1.3 Amendments to Section 7: Borrower’s Negative Covenants.
A. Subsection 7.3(vi) of the Credit Agreement is hereby amended by deleting it in
its entirety and by inserting in lieu thereof the following:
“(vi) so long as no Potential Event of Default or Event of Default has
occurred and is continuing at the time of such Investment, Borrower and its Domestic
Subsidiaries that are Subsidiary Guarantors may make and own other
Investments in an
aggregate amount not to exceed at any time $25,000,000;”
B. Subsection 7.5 of the Credit Agreement is hereby amended by deleting in their entirety the
second and third provisos in the first sentence and by inserting in lieu thereof the following:
“provided
further so long as no Potential Event of Default or Event of
Default has occurred and is continuing, Borrower and its Subsidiaries may make
Restricted Junior Payments in the form of share repurchases or dividends in an
aggregate amount not to exceed $25,000,000;”
Section 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the satisfaction of all of
the following conditions precedent (the date of satisfaction of such conditions being referred to
herein as the “Amendment Effective Date”):
A. On or before the Amendment Effective Date, Borrower shall deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
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where appropriate, for each Lender and its counsel) copies of this Amendment, executed by Borrower.
B. On or before the Amendment Effective Date, all corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and
its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel,
and Administrative Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably request.
C. On or before the Amendment Effective Date, Administrative Agent shall have received an
executed consent to this Amendment in the form attached hereto as
Exhibit A (a “Lender Consent”)
from Requisite Lenders and from each Revolving Lender.
Section 3. BORROWER’S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in
the manner provided herein, Borrower represents and warrants to each Lender that the following
statements are true, correct and complete:
A. Corporate Power and Authority. Borrower has all requisite corporate power and authority to
enter into this Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”).
B. Authorization of Agreements. The execution and delivery of this Amendment and the
performance of the Amended Agreement have been duly authorized by all necessary corporate action on
the part of Borrower.
C. No Conflict. The execution and delivery by Borrower of this Amendment and the performance
by Borrower of the Amended Agreement do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Borrower or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on Borrower or any of
its Subsidiaries; (ii) conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any Contractual Obligation of Borrower or any of its Subsidiaries;
(iii) result in or require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries; or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Borrower or any of its
Subsidiaries.
D. Governmental Consents. The execution and delivery by Borrower of this Amendment and the
performance by Borrower of the Amended Agreement do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
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E. Binding Obligation. This Amendment and the Amended Agreement have been duly executed and
delivered by Borrower and are the legally valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights
generally or by equitable principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit Agreement. The representations
and warranties contained in Section 5 of the Credit Agreement are and will be true, correct and
complete in all material respects on and as of the Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.
G. Absence of Default. No event has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Amendment that would constitute an Event of
Default or a Potential Event of Default.
Section 4. MISCELLANEOUS
A. Reference
to and Effect on the Credit Agreement and the Other Loan Documents.
(i) On and after the Amendment Effective Date, each reference in the Credit Agreement
to “this Agreement”, “hereunder”, “hereof, “herein” or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”,
“thereof or words of like import referring to the Credit Agreement shall mean and be a reference to
the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall not, except as
expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of Administrative Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. Fees and Expenses. Borrower acknowledges that all costs, fees and expenses as described in
subsection 10.2 of the Credit Agreement incurred by Administrative Agent and its counsel with
respect to this Amendment and the documents and transactions contemplated hereby shall be for the
account of Borrower.
C. Headings. Section and subsection headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment for any other
purpose or be given any substantive effect.
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EXHIBIT A
to Seventh Amendment
to Credit Agreement
to Seventh Amendment
to Credit Agreement
CONSENT OF LENDER
Reference is hereby made to the Seventh Amendment to Credit Agreement
(the “Amendment”) dated as of October , 2006 by and between LodgeNet Entertainment
Corporation, a Delaware corporation (“Borrower”), and Canadian Imperial Bank of Commerce, as
administrative agent for the Lenders (“Administrative Agent”), which is made with reference to that
certain Credit Agreement dated as of August 29,2001, as amended, by and among Borrower, the Lenders
named therein, Administrative Agent, the Syndication Agent named therein, the Co-Documentation
Agents named therein, the Co-Lead Arrangers named therein and the Swing Line Lender named therein.
The undersigned Lender hereby consents to the execution and delivery of the Amendment by
Administrative Agent on its behalf, substantially in the form of the draft presented to the
undersigned Lender on October , 2006.
Dated: October ,2006
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